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FINANCIAL CONTROLLERSHIP
PRELIMINARY EXAMINATION
THEORETICAL APPLICATION
I. Matching Type. Write the letter of that corresponds to the best answer.
a. Balance Sheet k. Fixes Asset Turnover
b. Cash Conversion Cycle l. Gross Profit Margin
c. Cash Flow from Financing m. Income Statement
d. Cash Flow from Investing n. Inventory Turnover
e. Cash Flow from Operations o. Liquidity
f. Cash Flow Statement p. Net Margin
g. Common Size Balance Sheet q. Operating Leverage Effect
h. Common Size Income Statement r. Operating Performance
i. Debt Ratio s. Receivable Turnover
j. Financial Leverage Effect t. Total Asset Turnover
1. It shows resources of the firm and how it has financed these resources
2. It contains information on the profitability of the firm during some period of time
3. Integrates the information on the balance sheet and income statement
4. The sources and uses of cash that arise from the normal operations of a firm
5. The change in gross plant and equipment plus the change in the investment account.
6. Financing sources minus financing uses.
7. It expresses accounts as a percentage of total assets.
8. It expresses all items as a percentage of sales.
9. It indicate the ability to meet future short-term financial obligations
10. It measures how well management is operating a business.
11. It reflects utilization of fixed assets.
12. It indicates the effectiveness of a firm’s use of its total asset base.
13. It measures the rate of profit on sales
14. It measures the rate of profit on sales after operating expenses.
15. It indicates how effective the business is on its credit policy.
16. It indicates how efficient the company utilizes its inventory.
17. It indicates how much time it takes for the company to convert collection or their investment into
cash.
18. This is used to estimate the percent change in income and return on assets for a given percentage
change in sales volume.
19. It is used to quantify the effect of leverage within a company.
20. It measures the proportion of debt used given the total capital structure of the company.
SITUATIONAL APPLICATION
II. Short Problems. Solve the following requirements. Box your final answer and show your
computation in good form.
Investment K L M
Requirements:
Compute the following:
1. Receivable Turnover
2. Average No. of Days Receivable Outstanding
3. Inventory Turnover
4. Average No. of Days in Stock
5. Payable Turnover
6. Average No. of Days Payable Outstanding
7. Cash Conversion Cycle